The nation's capital will be bursting with enthusiasm and the world will be watching with high expectations Jan. 20 as the nation's first African-American president is sworn into office on the steps of the U.S. Capitol, a monument to democracy that slaves helped to build.

But as Barack Obama's inaugural planners begin their work, they face an extraordinary challenge: How should they stage a celebration that honors this moment in American history at a time when the country is gripped by the worst economic crisis since the Great Depression?

"That's the real tightrope walk -- to convey the historic nature without the histrionics of ostentation," says Notre Dame professor Robert Schmuhl, author of Statecraft and Stagecraft: American Political Life in the Age of Personality. "The most expensive presidential campaign may have won Barack Obama the White House, but the inauguration needs to convey a different message and image."

The day is beginning to take shape.

Giant viewing screens will be set up along the National Mall for those who can't get up close, and a splashy celebrity ball will feature director Spike Lee, actress Susan Sarandon and musician Elvis Costello. In a nod to tough times, the inaugural committee is not accepting donations of more than $50,000 -- a big drop from the $250,000 set by President Bush four years ago.

Private fundraising pays for most activities, such as the inaugural balls. Taxpayers foot the bill for security and the actual ceremony.

Presidential Inaugural Committee spokesman Josh Earnest says planners are putting together events that "acknowledge the severity" of the economic crisis and are focused on the notion that "this isn't just a celebration of an election but also a celebration of our democracy."

The inauguration "serves as a reminder that in these challenging times, our citizens want the kind of leadership that's going to galvanize the country," he says.

Washington's mayor, Adrian Fenty, predicts that up to 5 million people could flood the city, surpassing the record 1.2 million who lined the streets of the capital in 1965 to see Lyndon Johnson take the oath of office -- the first public swearing-in after John Kennedy's assassination.

More than 1,300 groups have applied to march in Obama's Inaugural Parade, compared with slightly more than 400 applications for President Bush's second inauguration in 2005.

Demand for the 240,000 free public tickets to Obama's swearing-in is so intense that Sen. Dianne Feinstein, D-Calif., head of the Joint Congressional Committee on Inaugural Ceremonies, asked online auction houses to stop selling them to prevent profiteering.

So far, eBay and its other Internet arms including StubHub have barred such sales on their sites.

Anxiety over the economy has stalled some planning of inaugural parties and other activities.

"People are waiting to see what happens with the economy and what tone the Obamas want to set," says veteran Washington insider John Graham, president and CEO of the American Society of Association Executives.

"People are reluctant to do things that are seen as over the top."

Some Obama supporters acknowledge that the tough economy calls for restraint but say little can contain their jubilation.

Yvette Williams, a mortgage broker from Las Vegas, said her family's finances are pinched by the free fall in housing prices. Yet nothing will stop her from coming to Washington next month with her husband and two teenage daughters.

"We want to celebrate," she says. "We have earned it."

Democratic strategist Paul Begala says a big, bold event is just what the country needs — at least for one day.

"This country needs an exuberant celebration of change" from the Bush administration, Begala says.

The Carter Example

Other incoming presidents have toned down their inaugural events during difficult times.

Jimmy Carter, elected in the post-Watergate era, broke with tradition and braved the wind and freezing temperatures to walk the one and a half miles from the swearing-in ceremony on the Capitol steps down Pennsylvania Avenue to the White House.

At inaugural balls that night in 1977, fancy food was nixed in favor of pretzels and peanuts.

"He wanted to show people that he wasn't an aristocrat and that this wasn't a coronation," says Marvin Kranz, a retired American history specialist at the Library of Congress. "He wanted people to know he was a plain old peanut farmer from Georgia."

President Bush's second inauguration in 2005 was the first after the 9/11 terrorist attacks. With U.S. troops fighting in Iraq and Afghanistan, "we tried to respect the fact, at every single one of our events, that we were a country at war," says Jeanne Phillips, a Dallas oil company executive who oversaw both Bush inaugurations. The schedule included a "Commander-in-Chief Ball" with free tickets distributed to 2,000 members of the armed services and their relatives.

History shows that presidential transitions amid crisis "are actually opportunities for leaders who understand them as such, and not merely a transfer of power," says Richard Norton Smith, who has been the director of five presidential libraries.

That was the case when Franklin Roosevelt was sworn into office March 4, 1933, during the depths of the Great Depression and a panicked run on banks.

Roosevelt was a largely unknown leader, elected amid public dismay over his predecessor Herbert Hoover's handling of the nation's economic troubles, Smith says.

Roosevelt's inaugural address telling Americans that the "only thing we have to fear is fear itself," followed by a burst of legislative activity to pass work-relief programs and insure bank deposits, "converted the psychology of a battered country almost overnight," Smith says.

Former White House chief of staff Kenneth Duberstein says Obama should harken back to the first inauguration of Duberstein's old boss, Ronald Reagan, for a modern-day example of setting the right tone.

"In some ways, it's similar to 1980 when the country was going through economic malaise and was in a recession," he says. "America had lost pride in itself and America didn't have the same respect around the world."

After Reagan was sworn in Jan. 20, 1981, he delivered a speech that was "uplifting and confidence-building," Duberstein recalls.

"It was saying to the world, 'There's a new day in America and things are going to get better.' "

High Expectations for Obama

There's no shortage of advice for the Obama:

• Schmuhl says Obama knows "the significance of words" and he should make sure his inaugural address "overshadows everything else going on."

• Steve Grossman, a former Democratic National Committee chairman, says the inauguration is a chance for the new president to rally the people -- young, old, rich and poor -- to sacrifice and work for a cause, possibly energy independence.

Obama, he says, could use the moment "to bring the American people together and rededicate to some bigger challenge, some Apollo project, some Kennedyesque-man-on-the-moon-by-the-next-decade-type project ... that is part of our future (as) an independent nation and a sovereign nation built on our own ingenuity as people."

• Harry Thomason, a TV and film director/producer who worked on the Clinton inaugurations, suggests that Obama harness the power of the Internet, both to make more people feel they're a part of the event -- "I'd set up a lot of webcameras," Thomason says -- and to focus on a particular cause.

"It might even be possible to use the Internet to gather money for something -- the homeless or another cause, something that could happen fast," Thomason says.

The Internet already has played a huge role in Obama's historic rise to the presidency, enabling him to raise record amounts of money online.

'No way' She'll Miss It

Williams, who signed up as a campaign volunteer early last year, is confident Obama can rise to the occasion.

"We know that our country is in good hands," she says.

And she is determined to be here to celebrate.

She made her hotel reservations just days after Obama's strong showing in the Super Tuesday primaries and caucuses on Feb. 5.

Since becoming a volunteer, Williams has collected a vast array of campaign memorabilia, including T-shirts, posters and even a water bottle from which Obama drank during a visit to her home. It sits on her bedside table and everyone in the family knows not to touch it.

"I have his DNA in case we need to clone him," she says with a laugh.

Now, she's hunting for tickets to attend the swearing-in for herself, her husband, Damone, and their children, Dominique, 16, and Alyse, 13. She's contacted party officials, members of Congress and the campaign.

"I've been involved with this campaign every step of the way," says Williams, 50.

"There's no way I'm not going to be at that inauguration. So somebody better get me a ticket ... It's been a long 21 months for us."

Alan Solomont, a Boston philanthropist and venture capitalist who raised money for Obama's campaign, says he expects the tone of the day to be similar to that on election night in Chicago's Grant Park, when hundreds of thousands of people stood waiting outdoors for hours. Many in attendance wept openly when Obama, his wife, Michelle, and daughters, Malia, 10, and Sasha, 7, walked on stage.

"I don't think anyone was forgetting the troubles our country faces" that night, Solomont says. "But that's exactly why we elected this man. We had just finished electing a leader who engenders the optimism that we are strong enough to weather any storm."

Begala says Obama has shown repeatedly that he knows how to set the right tone.

"It's instructive that the very first thing he did the day after being elected to the presidency was go to a parent-teacher conference," he says. "He seems to be an extraordinarily grounded person ... The inauguration takes on the character of the president. I think it's going to be fun, but I don't worry about it striking the wrong tone. I think this guy has perfect pitch."

The key to a successful inauguration will be making all Americans feel good about it, Thomason says.

Planners need to "make the people who voted against Barack feel good, too," he says.

That's where he thinks the troubled times can help.

"Much more than in 1992, there's a feeling that we're sort of all in this together, that we're in a deep ditch," Thomason says.